Years ago, I found myself sitting in law school in Moot Court wearing an oversized itchy blue suit. It was a horrible experience. In a desperate attempt to avoid anything like that in the future I enrolled in a tax course. I loved it. I signed up for another. Before I knew it, in addition to my JD, I had a LL.M Taxation. I needed only to don my cape…. taxgirl® was born. Today, I live and work in Philadelphia, PA, one of the best cities in the world (I can't even complain about the sports teams these days). I landed in the City of Brotherly Love by way of Temple University School of Law. While at law school, I interned at the estates attorney division of the IRS. At IRS, I participated in the review and audit of federal estate tax returns. I even took the lead on a successful audit. At audit, opposing counsel read my report, looked at his file and said, “Gentlemen, she’s exactly right.” I nearly fainted. It was a short jump from there to practicing, teaching, writing and breathing tax.

NY Man Who Died During Arrest Attempt Allegedly Targeted For Selling Untaxed Cigarettes

In New York City, a pack of MarlboroMarlboro Reds will cost you nearly $13.00. That’s because not only does New York State charge $4.35 per pack on cigarettes – the highest tax, by state, on cigarettes in the country – but New York City tax adds an additional $1.50, bringing the combined local/state tax rate to $5.85. Federal excise taxes on cigarettes boost the rate an additional $1.01, upping the total to $6.86 in taxes alone to buy a pack of cigarettes in the Big AppleApple.

Federal, state and local taxes now account for nearly half of the cost of the average pack of cigarettes across the country. However, the disparity in tax burden from the top (New York, by state) and the bottom (Missouri, by state, at just 17 cents per pack) makes it worth your while to buy cigarettes in low-tax states and bring them into higher-tax states. There is, however, one not-so-teensy problem: it’s potentially illegal.

Under the Contraband Cigarette Trafficking Act, it is a felony for any person to ship, transport, receive, possess, sell, distribute, or purchase more than 10,000 cigarettes (500 packs) “that bear no evidence of state cigarette tax payment in the state in which the cigarettes are found if the state requires a stamp to be placed on cigarette packages to demonstrate payment of taxes.” In most states, it’s also a crime to sell cigarettes without a proper license and/or tax certificate. Those crimes are generally classed as misdemeanors.

So why bother? It’s quite profitable. The ATF (Bureau of Alcohol, Tobacco, Firearms and Explosives) figures that solely by purchasing cigarettes in a low tax state and reselling them in a high tax state, a seller can make a profit (report downloads as pdf) up to $23,000 on 10 cases of cigarettes – that’s considered a car load. Profits go up to $90,000 on 50 cases for a van load and finally, up to $465,000 for 200 cases for a small truck load. Those sorts of dollars likely explain why New York sits atop the list of smuggling rates in the country. According to The Mackinac Center for Public Policy, nearly 60% of cigarettes sold in New York are smuggled into the state.

Cigarette taxes serve two real purposes: raising revenue (don’t let the pols tell you different) and an attempt to change behavior. The latter may be working but not necessarily in the ways we hope. It’s true that higher taxes may stop some folks from smoking but it’s also clear from the numbers that the sale and purchase of cigarettes is moving underground. Expensive or not, people still like to smoke.

Eric Garner knew that all too well. The 43-year-old Staten Island man could often be found on the streets selling loose cigarettes. The New York Timesreported that Garner had been arrested more than 30 times, mostly for selling loose cigarettes brought into New York in order to avoid tax. He had been arrested at least twice in 2014 alone for selling loose cigarettes.

The arrests were clearly bothersome to Garner – but not so annoying that he would stop. Fifty-year-old Lonnie “Loosie” Garner (same last name but no indication of relation), explained why in 2011, saying:

The tax went up, and we started selling 10 times as much. BloombergBloomberg thinks he’s stopping people from smoking. He’s just turning them onto loosies.

Loosies is the street term for single, unpackaged cigarettes. Selling unpackaged cigarettes at a discount (meaning that you’re not charging tax) can be profitable: “Loosie” Garner claimed that he sold about 2,000 cigarettes a day, pocketing $120 to $150.

Despite having a criminal history, Eric Garner denied doing anything wrong on the afternoon of July 17, telling the officer that came to arrest him that day, “I didn’t do nothing. Every time you see me, you want to harass me, you want to stop me.” He had, he tried to explain, just broken up a fight, a claim that seems to be supported by eyewitnesses and video:

(Please note that clicking on the video may be disturbing for some readers.)

He refused to put his arms behind his back. The police made an attempt to arrest him nonetheless. Several officers brought the 6’3″ 350-pound Garner down – and allegedly putting Garner in a chokehold. Garner, whose health problems included asthma, screamed, “I can’t breathe” at least six times. And then, Garner went silent and was eventually pronounced dead.

The police report downplayed the incident, claiming there was no chokehold and that Garner had not been in distress. The coroner, however, disagreed, officially ruling Garner’s death a homicide by chokehold and chest compression. The president of the police union has denied the allegations, saying that the police actions were proper and did not involve a chokehold. One of the officers involved in the incident, Daniel Pantaleo, has surrendered his badge and gun, pending investigation. Another has been assigned to desk duty.

The fact that those officers came upon Garner on this particular day was no coincidence. Garner had been arrested for those loose cigarettes before. He’d been warned about those loose cigarettes before. And folks had complained before. That’s why Chief Philip Banks III – the top ranked uniformed officer in the NYPD – sent an officer to investigate complaints about the sale of loose cigarettes. Banks had received complaints about the behavior since March: one of those complaints specifically identified “a man named Eric.”

Why target the sale of loose cigarettes? Authorities say it’s a quality-of-life issue. And it is clearly a crime. But I can’t help but wonder: would this be a different conversation if it had been a different sort of crime? Like murder? Or child molestation? Or even selling hard drugs? Are we, by driving up the cost of cigarettes (ostensibly to stop the sale of cigarettes and save lives), actually creating a bigger problem? Does it make sense that criminals are willing to take the same kinds of risks to smuggle and sell cigarettes as they are for other kinds of crimes? In other words, if driving up the costs of cigarettes is good tax policy (which I’m not sure that it is), is it good overall policy?

As the discussion moves forward about what happened and whether it was appropriate, I do hope what doesn’t get left out is what lead to police being on that street on that day. We took a legal substance (cigarettes) and taxed it enough to make the illegal sale attractive – so attractive that more than half of the cigarettes sold in New York are done so illegally. More than half. And then we told our police to make it priority to take those sellers down. And the result was tragic.

Am I suggesting that those who voted to raise cigarette taxes should have had a crystal ball that would have predicted this particular result? Of course not.

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I live in Chicago and we have a similar tax law. But we don’t aggressively go after so-called criminals because of it. The people who complained about Mr. Garner were the store owners because he was selling in front of their stores. Maybe had he taken it corners away he wouldn’t be in that situation. But from the pictures it looks like he was in front of someone’s store who also sold cigarettes. That goes on a lot in NYC, with the purse sellers and other outdoor vendors. If it’s a misdemeanor shouldn’t it just warrant a ticket? and not an actual arrest?

As a nation supposedly of law, we have began a culture of obeying or disobeying laws of our choice. This is not good for our society, nor the culture of diversity we seem to embrace. This can be best seen at the national level in the acts of the President and Congress. They supposedly set the example for governing, but both have exhibited total disregard for the laws and execution of same. One reader mentions “If it’s a misdemeanor shouldn’t it just warrant a ticket?”. In days of past, that would have been enough. But this guy is a professional criminal, pure and simple. He would prefer to face the criminal system, and unfortunately, he experienced the results of possibly an arrest that went bad. But the police did what that felt they had to do. Simple question: If this ‘citizen’ was law-abiding, would all of this been necessary. Too many times, society led by a portion of folks, blame the law, the police, the schools, etc., for the results such as these happen. When are we ever going to hold people responsible for their actions? There always seems to be an excuse for any behavior in most circumstances. Our society tries to hard to appease and include. Not a bad thing, but boundaries are established and should be honored. If this ‘citizen’ wasn’t looking for a quick buck, he most likely would be walking around today. Finding fault with those that we expect to enforce the laws for all of us, is wrong. rwp

lived in nyc for 40 years, not a fan of cigarettes, never smoked in my life. BUT i predicted 20 years ago that raising the tax on cigarettes to an astronomical level would change the behavior of the buyers, not reduce smoking. it is too easy to use the bridge and tunnel and bring in cigarettes. bring the tax down, so a pack costs an amount that makes smuggling not cost effective, stop wasting the police time and money, and increase tax collected by legitimate sellers. when you criminalize behavior all you do is create criminals. i wonder what they will do when marijuana becomes legal and, most likely, cheaper than tobacco.

While I think there is a lot more to be said about the taxation of cigarettes, especially if it DID result in decreased usage – the government would have to find another source of taxation. I wonder how much revenue the government obtains from this taxation. When people started buying and using more energy efficient autos or reducing their consumption of gasoline, the government cried about loss of tax revenue. That being said I think the real crime here is not “loosies”, or government taxation issues, but excessive force, choke holds and police homicide where other measures (i.e. taser at low wattage) could have been used if the individual was resisting arrest. Poor police judgement, poor training, poor police work, and poor leadership is a crime in my book.

Lila, I agree that the biggest issue is what happened *after* the crime was committed (the police reaction). I raise the tax issue because the tax policy in this instance has clearly resulted in creating increased opportunity for criminal behavior – when nearly 60% of a legal substance is obtained illegally, that should cause us to revisit whether that’s a good thing. I also question whether a nonviolent crime on this level – a misdemeanor in NYC – warranted an arrest. Why not a ticket? If those two issues had been considered differently, we might have had a different result.

I have read the comments below and I kind of agree with most of them. Some seem to be quite mean spirited however; there is a point to all of them. I am more inclined to agree with the author of the article & add this comment. Would the man have been treated so harshly if he had been white?

Modern day prohibition with the same results. This is a great example of where taxes have not been effective to implement social policy. Taxes are justified by the higher societal (and medical) costs that smoking imposes, but not to change behaviors that we don’t like.

You discuss this as a pure tax-related, revenue generating matter, saying nothing of the very significant public health implications. Is there less teen smoking because of the greatly increased cost? If one hasn’t started smoking before age 21, the likelihood of them becoming a regular smoker later is very substantially reduced, and that is a huge health benefit for the individual and for the society which shares the expense of this habit. When you leave out this piece, the conversation cannot be a very well-informed, reasoned one.

dcdoc, Thanks for your comment. I didn’t think it made sense in the context of the piece to talk about the efficacy of sin taxes since I was really focusing on the disparity between the states in terms of total tax – that’s what drives the criminal element. If you have interest, I’ve written quite a few articles about smoking, sin taxes and whether they are actually effective at reducing smoking rates for various groups, including young people and those in lower incomes (one here and another here). Spoiler alert: the results are mixed. While numbers are down for younger smokers, it’s difficult to say whether it’s cost, education, social changes or a mix of the three.

Ms. Phillips, you wrote, “We took a legal substance (cigarettes) and taxed it…” and “And then we told our police to make it priority…” and “[T]hose who voted to raise cigarette taxes…”

I have trouble with the non-descript “we” and “those [lawmakers].” Who are “we”? I ask rhetorically because that has been the trouble with columnists opining on this incident from the position of the taxation question. While I too find the examination of the situation from this angle utterly valid I’m also left utterly dissatisfied by its lack of depth. Though your answer to dcdoc explains your intention was to focus on a figure, his comment illustrates exactly what is wrong with the “we” and “those” that isn’t good enough when discussing what led to this. The idea to tax cigarettes so highly comes not from “we” or “those” lawmakers but from the anti-smoker “public health” activists. This is not a complete analysis without a review of their relentless crusade that eventually wears down lawmakers to go along with the punitive (if it were merely for revenue it would not be as high) taxation. Even former Gov. Paterson lamented after a tax hike under his administration that in hindsight it was excessive and the result of public apathy (provided cover for lawmakers to vote for it), both at the hands of an “attack on smokers.” That attack comes from Big Anti-Smoker. In this case, dcdoc’s comment is more telling than you gave it credit for. Your column questions the outcome of such high taxation which implies the direction in which the solution could be found. But leaving it at “we” is a frustrating disservice. You can’t fix it if you don’t know where it’s broken. You have to get past “those” lawmakers who voted for it to find what needs to be fixed — the crusade and its members who are devising and ramming through this taxation show.

Another over weight man is dead. He committed some minor violation of a law. He is really dead because he was piled on by a heard of gunmen wearing badges. While being choked by one officer, his fat belly was compressed into his lungs and he could not breathe. This happens over and over again, all across the country. A fat man was crushed to death in Moore Oklahoma in a similar situation because of a family altercation that caught the attention of gunmen with badges. A fat man was crushed to death in Sacramento California by gunmen wearing badges. At some point in time when enough people are dead, maybe we will learn how to arrest fat people without killing them.

What I find really bothersome here is that this story was written about selling loose cigarettes and others responding with comments seem to think that loosies and taxes and strict obedience to the law, is the subject. I disagree. Mike Brown or whatever his name was, who was shot dead after attacking and trying to take a police officers gun has become a symbol of the police behavior toward minorities in America. Death sentences carried out by the first officer on the scene for minorities who are suspected of or have a previous history of misdemeanors. Loosie Garner would be a better symbol of a deep seated problem in America.